Correlation Between ARC Document and SPAR

Can any of the company-specific risk be diversified away by investing in both ARC Document and SPAR at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ARC Document and SPAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ARC Document Solutions and SPAR Group, you can compare the effects of market volatilities on ARC Document and SPAR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ARC Document with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARC Document and SPAR.

Diversification Opportunities for ARC Document and SPAR

0.0

Correlation Coefficient

ARC Document  SPAR

Pay attention - limited upside

The 3 months correlation between ARC and SPAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ARC Document Solutions and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and ARC Document is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ARC Document Solutions are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of ARC Document i.e., ARC Document and SPAR go up and down completely randomly.

Pair Corralation between ARC Document and SPAR

If you would invest (100.00) in ARC Document Solutions on December 26, 2024 and sell it today you would earn a total of  100.00  from holding ARC Document Solutions or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ARC Document Solutions  vs.  SPAR Group

ARC Document Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARC Document Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ARC Document is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SPAR Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPAR Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ARC Document and SPAR

The main advantage of trading using opposite ARC Document and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARC Document position performs unexpectedly, SPAR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SPAR will offset losses from the drop in SPAR's long position.

The idea behind ARC Document Solutions and SPAR Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.